PITTSFIELD, Mass., Oct. 28, 2013 /PRNewswire/ -- Berkshire
Hills Bancorp, Inc. (NYSE: BHLB) reported that, for the
first nine months of the year, core income increased by 18% to
$36.7 million from $31.0 million due to the benefit of organic and
acquisition growth initiatives. Nine month core earnings per
share increased by 3% to $1.47 from
$1.43. The benefit of business
expansion has more than offset pricing pressures in the low
interest rate environment.
(Logo:
http://photos.prnewswire.com/prnh/20120131/NE44966LOGO )
Third quarter core earnings totaled $10.7
million in 2013 compared to $11.4
million in 2012. The widely publicized reduction in
residential mortgage refinancing demand led to a $0.10 per share after-tax reduction in mortgage
banking fees. As a result, third quarter core earnings per
share decreased to $0.43 in 2013,
compared to $0.52 in the third
quarter of 2012. Results in the most recent quarter
included 16% annualized loan growth and a 4% reduction in core
non-interest expense, compared to the linked quarter, reflecting
Berkshire's recent initiatives in
response to the mortgage changes.
Nine month GAAP net income increased to $30.6 million in 2013 from $23.9 million in 2012. These amounts
include net non-core charges primarily related to mergers, systems
integration, and restructuring expenses. They also include a
third quarter 2013 net non-core credit adjustment posted as an
out-of-period correction to recognize prior period interest income
on loans acquired in bank acquisitions, net of related taxes and a
variable compensation adjustment. Nine month GAAP net income
increased to $1.22 per share in 2013
from $1.10 in 2012. Third
quarter GAAP net income was $8.1
million and $10.0 million in
2013 and 2012, while third quarter GAAP earnings per share were
$0.33 and $0.46 per share, respectively.
Non-core charges in the most recent quarter were primarily due to
restructuring charges intended to reduce ongoing operating expenses
and improve future profitability.
THIRD QUARTER FINANCIAL HIGHLIGHTS
- 16% annualized increase in commercial business loans and in
total loans
- 8% annualized increase in total commercial loans
- 7% annualized increase in total deposits
- 16% annualized increase in demand deposits
- 3.93% net interest margin
- 4% decrease in core non-interest expense compared to prior
quarter
- 0.58% non-performing assets/total assets
- 0.32% net loan charge-offs/average loans
CEO Michael Daly stated, "We had
a good quarter and our business expansion initiatives have driven
year-to-date earnings growth despite the headwinds resulting from
the interest rate environment. At the beginning of the third
quarter, we took action to further consolidate the benefits from
our expansion. We renewed loan growth while trimming core
expenses, achieving near-term core earnings and profitability
targets."
Mr. Daly continued, "We expect to accomplish our long term
objectives through market share growth in our New England and
New York footprint. We've
attracted a strong team and assembled the infrastructure to enable
us to be the preferred provider of financial solutions.
Recently, George Bacigalupo was
promoted to the position of EVP – Commercial Banking. George
is an accomplished regional commercial banking executive serving
middle market businesses. Our commercial market managers
produced strong loan growth in the quarter and business development
prospects remain encouraging for the months ahead."
Mr. Daly concluded, "We are restructuring targeted operations to
drive additional efficiencies arising from expansion and
infrastructure investment. Non-core restructuring charges
were recorded during the quarter, enabling us to lower ongoing
operating expenses as demonstrated by our third quarter
results. In addition, there has been good progress towards
completing the purchase of 20 New York branches from Bank of
America in January. We are targeting overall positive
operating leverage in 2014 based on revenue growth and efficiency
goals."
DIVIDEND DECLARED
The Board of Directors voted to declare a cash dividend of
$0.18 per share to shareholders of
record at the close of business on November
14, 2013, payable on November 27,
2013. This dividend equates to a 2.7% annualized yield based
on the $26.21 average closing price
of Berkshire's common stock during
the third quarter of 2013.
NOTE ON ACCOUNTING CORRECTION
During the most recent quarter, the Company recorded a
correction to recognize $2.2 million
of prior period revenue that was primarily related to interest
income earned on loans acquired in bank acquisitions, together with
an income tax adjustment. This included $0.9 million in additional revenue for the first
half of 2013, with the remainder representing revenue which was not
previously recorded in 2011 and 2012. After evaluating the
quantitative and qualitative aspects of these adjustments, the
Company concluded that prior period statements were not materially
misstated, and therefore no restatement was required and no
revision was necessary in the disclosure of the level and trend of
earnings. The Company classified this revenue as non-core in its
determination of core earnings.
FINANCIAL CONDITION
Berkshire increased its earning
assets by $227 million (5%) in the
most recent quarter including growth of $153
million (16% annualized) in total loans, with growth
registered in most major loan categories. Loan growth was
funded in part with a $67 million
increase (7% annualized) in deposits, and Berkshire made progress towards its goal of
completing the purchase of more than $600
million in deposits from Bank of America in January.
Measures of asset quality, liquidity, and capital
remained within targets and the Company continued to maintain an
asset sensitive interest rate risk profile. Tangible book
value per share increased to $16.08
and total book value per share grew to $26.98.
Earning asset growth included the benefit of ongoing business
development as well as targeted asset purchases, primarily
consisting of medium duration government agency mortgage backed
securities. Run-off of commercial real estate related loans
decreased and total commercial mortgage loans increased at a 4%
annualized rate. Commercial business loans continued to grow
strongly, increasing at a 16% annualized rate for the quarter and
15% year-to-date. As a result, total loan growth turned
positive for the year-to-date. A significant portion of
residential mortgage production was retained in the portfolio,
benefiting from promotion of 10/1 adjustable rate mortgages as an
alternative to higher cost 30-year fixed rate mortgages.
Consumer loans advanced at a 21% annualized rate in the quarter,
mostly due to higher originations of prime indirect automobile
loans by Berkshire's Syracuse
based consumer lending team. Based on quarter-end lending
pipelines, the Company expects to produce further net loan growth
during the remainder of the year.
Asset quality metrics remained favorable in the most recent
quarter. Quarterly annualized net loan charge-offs measured
0.32% of average loans. Quarter-end non-performing assets
were 0.58% of total assets, compared to 0.52% at the start of the
year. Accruing delinquent loans were 0.71% of total loans
after nine months, compared to 1.11% at the start of the
year. The loan loss allowance measured 0.83% of total loans
at both of the above dates.
The 7% annualized third quarter increase in total deposits
included 16% annualized growth in demand deposits and 19%
annualized growth in money market balances. Due to short term
promotions, the cost of deposits increased slightly to 0.55% from
0.52% in the prior quarter. Deposit growth included a
$49 million increase in commercial
deposits, including the benefit of ongoing commercial relationship
expansion. Total borrowings increased by $149 million as short term funds were used to
support earning asset growth pending the completion of the deposit
acquisition. The loan/deposit ratio measured 104% at
quarter-end. Berkshire
improved the utilization of its capital to support higher earning
assets, with the result that the ratio of tangible equity/assets
stood at 7.7% at quarter-end, compared to 8.1% at the start of the
quarter. The ratio of total equity/assets stood at
12.4% and 12.9% at these dates, respectively.
RESULTS OF OPERATIONS
Berkshire posted year-over-year
growth in net revenue totaling 17% in the third quarter and 24% for
the first nine months of the year due primarily to its organic and
acquisition growth strategies. Most categories of income and
expense increased year-over-year including the impact of
acquisitions. Core earnings increased by 18% for the first
nine months with the benefit of overall business
expansion. Berkshire achieved these results while
bearing the costs of maintaining its asset sensitive interest rate
risk profile, absorbing charges related to its branch and team
expansion, and investing in technology and other
infrastructure. GAAP earnings include the impact of net
non-core charges related to mergers, systems conversion,
restructuring, and securities gains. The reconciliation of
net income and core income, together with related financial
measures, is shown on tables F-9 and F-10 of the financial
tables. The core return on assets measured 0.81% in the most
recent quarter while the GAAP return on assets measured 0.61% after
the non-core items. The core return on tangible equity
measured 11.2% during the quarter, while the GAAP return on equity
measured 4.7%.
Compared to the linked quarter, Berkshire's third quarter net revenue
increased by 2%. Core net revenue decreased by 1% due to
lower mortgage banking fee revenue. Net interest income
increased by 12% while non-interest income declined by 22%,
including a decrease in realized equity securities gains.
Average earning assets increased by 2% in the most recent
quarter. Most of the growth came later in the quarter,
resulting in a 5% increase in period-end balances. In
addition to earning asset growth, net interest income benefited
from an improvement in the net interest margin to 3.93%. Net
interest income during the quarter included $8.5 million in purchased loan accounting
accretion, including $4.8 million
related to recoveries on acquired impaired loans and $2.2 million related to the out-of-period
accounting adjustment. Excluding purchased loan accounting
accretion, the net interest margin measured 3.21% during the
quarter, compared to 3.34% in the prior quarter due to the ongoing
impact of the low interest rate environment on earning asset yields
and changes in the asset mix.
Non-interest income decreased to $12.1
million in the third quarter of 2013, compared to
$15.6 million in the linked
quarter. This included a $1.7
million decrease in mortgage banking fees and a $1.3 million decrease in other loan fees related
primarily to loan sales in the earlier quarter. The decrease
in mortgage banking revenue resulted from lower refinancing demand,
tighter margins on secondary market activity, and higher retention
of adjustable rate mortgages in the mortgage portfolio.
The third quarter provision for loan losses increased to
$3.2 million in 2013 from
$2.7 million in the linked quarter
and from $2.5 million in the third
quarter of 2012. Net loan charge-offs totaled $3.2 million, $2.7
million, and $2.3 million for
these periods, respectively. There were no significant
changes in the Company's charge-off metrics, which remain low
compared to long term industry standards. Following the loan
loss provision, the loan loss allowance remained unchanged at
$33.2 million during the most recent
quarter and for the first nine months of the year.
Third quarter core non-interest expense decreased by
$1.4 million (4%) compared to the
linked quarter due to cost saving initiatives that were undertaken
in the third quarter. Most major categories of expense
declined. Full time equivalent staff decreased by 7% to 948
from 1,014 during the quarter. Compensation expense did not
fully reflect the declining run rate during the quarter, and this
was offset by higher variable compensation related to increased
business production and the increased prior period revenue
recognition.
Total GAAP non-interest expense increased to $42.8 million from $37.9
million in the linked quarter due to $6.5 million of non-recurring charges in the most
recent quarter, including $1.0
million related to the upcoming acquisition of Bank of
America branches, $2.4 million in
severance costs, and $2.8 million
related to facilities restructuring costs. The latter charge
related to nine properties that are being closed or
consolidated. Two branches are being consolidated in the
fourth quarter, and for the year, Berkshire will have consolidated five branch
offices (7% of the total) to achieve greater efficiency following
its acquisitions. The Company continues to evaluate
restructuring opportunities in order to improve efficiency.
The efficiency ratio improved to 61.0% in the most recent
quarter. The effective income tax rate was 32.6% in the most
recent quarter, which was generally in line with the Company's
expectations.
CONFERENCE CALL
Berkshire will conduct a conference
call/webcast at 10:00 a.m. eastern
time on Tuesday, October 29, 2013 to discuss the
results for the quarter and provide guidance about expected future
results. Participants should dial-in to the call a few
minutes before it begins. Information about the conference
call follows:
Dial-in:
|
888-317-6003
|
Elite Entry
Number:
|
8416293
|
Webcast:
|
berkshirebank.com
(investor relations link)
|
|
|
A telephone replay of the call will be available
through Wednesday, November 6, 2013 by
calling 877-344-7529 and entering conference
number: 10034938. The webcast and a podcast will be
available at Berkshire's website above for an extended
period. A PDF version of this release is available at
Berkshire's Investor Relations web
site.
BACKGROUND
Berkshire Hills Bancorp is the parent of Berkshire Bank –
America's Most Exciting Bank®. The Company has
approximately $5.5 billion in assets
and 74 full service branch offices in Massachusetts, New
York, Connecticut, and
Vermont providing personal and
business banking, insurance, and wealth management
services.
FORWARD LOOKING STATEMENTS
This document contains forward-looking statements as defined in
the Private Securities Litigation Reform Act of 1995. There
are several factors that could cause actual results to differ
significantly from expectations described in the forward-looking
statements. For a discussion of such factors, please see
Berkshire's most recent reports on
Forms 10-K and 10-Q filed with the Securities and Exchange
Commission and available on the SEC's website at www.sec.gov.
Berkshire does not undertake any
obligation to update forward-looking statements.
NON-GAAP FINANCIAL MEASURES
This document contains certain non-GAAP financial measures in
addition to results presented in accordance with Generally Accepted
Accounting Principles ("GAAP"). These non-GAAP measures
provide supplemental perspectives on operating results, performance
trends, and financial condition. They are not a substitute
for GAAP measures; they should be read and used in conjunction with
the Company's GAAP financial information. A reconciliation of
non-GAAP financial measures to GAAP measures is included in the
accompanying financial tables. In all cases, it should be
understood that non-GAAP per share measures do not depict amounts
that accrue directly to the benefit of shareholders. The
Company utilizes the non-GAAP measure of core earnings in
evaluating operating trends, including components for core revenue
and expense. These measures exclude amounts which the Company
views as unrelated to its normalized operations, including merger
costs, restructuring costs, and systems conversion costs.
Similarly, the efficiency ratio is also adjusted for these non-core
items and for tax preference items. The Company also adjusts
certain equity related measures to exclude intangible assets due to
the importance of these measures to the investment community.
Non-GAAP expense adjustments are primarily related to charges
related to merger and acquisition activity. These charges
consist primarily of severance/benefit related expenses, contract
termination costs, and professional fees. There are
additionally non-GAAP adjustments related to non-recurring
securities gains, discontinued operations, the disposition of
excess properties, and core systems conversion costs. In the
most recent period, non-core restructuring charges are related to
severance costs as a result of management and staffing changes,
along with facilities costs related to excess facilities where the
bank is exiting its occupancy and investment. As discussed
previously, non-core items recorded in the third quarter of 2013
also included the after-tax impact of the out-of-period accounting
adjustment, along with an adjustment of variable compensation based
on the additional revenue recognition.
CONTACTS
Investor Relations
Contact
Allison O'Rourke;
Vice President - Investor Relations; 413-236-3149
Media Contact
Ray
Smith, Assistant Vice President – Marketing;
413-236-3756
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
BALANCE SHEETS - UNAUDITED - (F-1)
|
|
|
|
September
30,
|
June 30,
|
December
31,
|
|
(In
thousands)
|
2013
|
2013
|
2012
|
|
Assets
|
|
|
|
|
Cash and due from
banks
|
$
61,149
|
$
56,623
|
$
63,382
|
|
Short-term
investments
|
15,710
|
23,482
|
34,862
|
|
Total cash and
short-term investments
|
76,859
|
80,105
|
98,244
|
|
|
|
|
|
|
Trading
security
|
15,330
|
15,566
|
16,893
|
|
Securities available
for sale, at fair value
|
684,716
|
568,268
|
466,169
|
|
Securities held to
maturity, at amortized cost
|
46,925
|
49,604
|
51,024
|
|
Federal Home Loan
Bank stock and other restricted securities
|
42,342
|
37,667
|
39,785
|
|
Total
securities
|
789,313
|
671,105
|
573,871
|
|
|
|
|
|
|
Loans held for
sale
|
27,064
|
64,101
|
85,368
|
|
|
|
|
|
|
Residential
mortgages
|
1,313,609
|
1,232,488
|
1,324,251
|
|
Commercial
mortgages
|
1,366,104
|
1,352,913
|
1,413,544
|
|
Commercial business
loans
|
668,983
|
643,924
|
600,126
|
|
Consumer
loans
|
675,147
|
641,350
|
650,733
|
|
Total
loans
|
4,023,843
|
3,870,675
|
3,988,654
|
|
Less: Allowance for
loan losses
|
(33,248)
|
(33,248)
|
(33,208)
|
|
Net loans
|
3,990,595
|
3,837,427
|
3,955,446
|
|
|
|
|
|
|
Premises and
equipment, net
|
83,136
|
88,644
|
86,461
|
|
Other real estate
owned
|
3,561
|
2,713
|
1,929
|
|
Goodwill
|
256,871
|
256,118
|
255,199
|
|
Other intangible
assets
|
15,030
|
16,337
|
19,059
|
|
Cash surrender value
of bank-owned life insurance
|
100,299
|
89,592
|
88,198
|
|
Deferred tax
asset
|
61,617
|
60,410
|
57,729
|
|
Other
assets
|
45,911
|
57,579
|
75,305
|
|
Total
assets
|
$
5,450,256
|
$
5,224,131
|
$
5,296,809
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Demand
deposits
|
$
669,878
|
$
644,059
|
$
673,921
|
|
NOW
deposits
|
352,762
|
356,695
|
379,880
|
|
Money market
deposits
|
1,357,201
|
1,295,771
|
1,439,632
|
|
Savings
deposits
|
438,135
|
444,586
|
436,387
|
|
Total non-maturity
deposits
|
2,817,976
|
2,741,111
|
2,929,820
|
|
Time
deposits
|
1,064,049
|
1,074,112
|
1,170,589
|
|
Total
deposits
|
3,882,025
|
3,815,223
|
4,100,409
|
|
|
|
|
|
|
Senior
borrowings
|
740,022
|
590,826
|
358,471
|
|
Subordinated
notes
|
89,663
|
89,647
|
89,617
|
|
Total
borrowings
|
829,685
|
680,473
|
448,088
|
|
|
|
|
|
|
Other
liabilities
|
65,351
|
55,465
|
81,047
|
|
Total
liabilities
|
4,777,061
|
4,551,161
|
4,629,544
|
|
|
|
|
|
|
Total stockholders'
equity
|
673,195
|
672,970
|
667,265
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
5,450,256
|
$
5,224,131
|
$
5,296,809
|
|
|
|
|
|
|
(1) Certain
reclassifications have been made to prior year balances to conform
to the current year presentation.
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED LOAN
& DEPOSIT ANALYSIS - UNAUDITED - (F-2)
|
|
LOAN
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized growth
%
|
(Dollars in
millions)
|
|
Sept. 30, 2013
Balance
|
|
June 30, 2013
Balance
|
|
Dec. 31, 2012
Balance
|
|
Quarter ended
September 30, 2013
|
Year to
date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential
mortgages
|
|
$
1,314
|
|
$
1,233
|
|
$
1,324
|
|
26
|
%
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
mortgages:
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
105
|
|
128
|
|
168
|
|
(74)
|
|
(50)
|
|
Single and
multi-family
|
|
132
|
|
129
|
|
124
|
|
9
|
|
8
|
|
Commercial real
estate
|
|
1,129
|
|
1,096
|
|
1,122
|
|
12
|
|
1
|
|
Total commercial
mortgages
|
|
1,366
|
|
1,353
|
|
1,414
|
|
4
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
business loans
|
669
|
|
644
|
|
600
|
|
16
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
loans
|
|
2,035
|
|
1,997
|
|
2,014
|
|
8
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
loans:
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
|
304
|
|
310
|
|
325
|
|
(9)
|
|
(9)
|
|
Other
|
|
371
|
|
331
|
|
326
|
|
48
|
|
18
|
|
Total consumer
loans
|
|
675
|
|
641
|
|
651
|
|
21
|
|
5
|
|
Total
loans
|
|
$
4,024
|
|
$
3,871
|
|
$
3,989
|
|
16
|
%
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized growth
%
|
(Dollars in
millions)
|
|
Sept. 30, 2013
Balance
|
|
June 30, 2013
Balance
|
|
Dec. 31, 2012
Balance
|
|
Quarter ended
September 30, 2013
|
Year to
date
|
|
Demand
|
|
$
670
|
|
$
644
|
|
$
674
|
|
16
|
%
|
(1)
|
%
|
NOW
|
|
353
|
|
357
|
|
380
|
|
(4)
|
|
(9)
|
|
Money
market
|
|
1,357
|
|
1,296
|
|
1,440
|
|
19
|
|
(8)
|
|
Savings
|
|
438
|
|
444
|
|
436
|
|
(5)
|
|
1
|
|
Total non-maturity
deposits
|
|
2,818
|
|
2,741
|
|
2,930
|
|
11
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total time
deposits
|
|
1,064
|
|
1,074
|
|
1,170
|
|
(4)
|
|
(12)
|
|
Total
deposits
|
|
$
3,882
|
|
$
3,815
|
|
$
4,100
|
|
7
|
%
|
(7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Quarterly
data may not sum to annualized data due to rounding.
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF INCOME - UNAUDITED - (F-3)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
(In thousands,
except per share data)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Interest and
dividend income
|
|
|
|
|
|
|
|
Loans
|
$
50,025
|
|
$
39,497
|
|
$
142,549
|
|
$
113,335
|
Securities and
other
|
4,479
|
|
3,626
|
|
12,533
|
|
11,116
|
Total interest and
dividend income
|
54,504
|
|
43,123
|
|
155,082
|
|
124,451
|
Interest
expense
|
|
|
|
|
|
|
|
Deposits
|
5,278
|
|
5,628
|
|
15,693
|
|
16,612
|
Borrowings and
subordinated debentures
|
3,357
|
|
2,270
|
|
10,479
|
|
6,416
|
Total interest
expense
|
8,635
|
|
7,898
|
|
26,172
|
|
23,028
|
Net interest
income
|
45,869
|
|
35,225
|
|
128,910
|
|
101,423
|
Non-interest
income
|
|
|
|
|
|
|
|
Loan related
fees
|
1,308
|
|
1,340
|
|
6,669
|
|
3,990
|
Mortgage banking
fees
|
444
|
|
4,306
|
|
4,790
|
|
6,553
|
Deposit related
fees
|
4,559
|
|
3,775
|
|
13,623
|
|
11,238
|
Insurance commissions
and fees
|
2,473
|
|
2,742
|
|
7,877
|
|
8,256
|
Wealth management
fees
|
2,137
|
|
1,774
|
|
6,471
|
|
5,431
|
Total fee
income
|
10,921
|
|
13,937
|
|
39,430
|
|
35,468
|
Other
|
832
|
|
375
|
|
1,722
|
|
885
|
Gain on sale of
securities, net
|
361
|
|
-
|
|
1,366
|
|
7
|
Non-recurring
gain
|
-
|
|
1
|
|
-
|
|
43
|
Total non-interest
income
|
12,114
|
|
14,313
|
|
42,518
|
|
36,403
|
Total net
revenue
|
57,983
|
|
49,538
|
|
171,428
|
|
137,826
|
Provision for loan
losses
|
3,178
|
|
2,500
|
|
8,278
|
|
6,750
|
Non-interest
expense
|
|
|
|
|
|
|
|
Compensation and
benefits
|
18,506
|
|
15,992
|
|
54,398
|
|
45,219
|
Occupancy and
equipment
|
5,614
|
|
4,599
|
|
17,119
|
|
13,484
|
Technology and
communications
|
3,304
|
|
2,302
|
|
9,775
|
|
6,518
|
Marketing and
promotion
|
590
|
|
419
|
|
1,831
|
|
1,548
|
Professional
services
|
1,757
|
|
1,327
|
|
5,011
|
|
4,185
|
FDIC premiums and
assessments
|
856
|
|
907
|
|
2,574
|
|
2,458
|
Other real estate
owned and foreclosures
|
138
|
|
42
|
|
445
|
|
215
|
Amortization of
intangible assets
|
1,307
|
|
1,314
|
|
4,029
|
|
3,982
|
Non-recurring and
merger related expenses
|
6,516
|
|
2,214
|
|
12,355
|
|
10,522
|
Other
|
4,196
|
|
3,046
|
|
12,665
|
|
8,409
|
Total non-interest
expense
|
42,784
|
|
32,162
|
|
120,202
|
|
96,540
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income
taxes
|
12,021
|
|
14,876
|
|
42,948
|
|
34,536
|
Income tax
expense
|
3,917
|
|
4,847
|
|
12,342
|
|
10,040
|
Net income from
continuing operations
|
8,104
|
|
10,029
|
|
30,606
|
|
24,496
|
Loss from
discontinued operations before income taxes
|
|
|
|
|
|
|
|
(including gain on disposals
of $63)
|
-
|
|
-
|
|
-
|
|
(261)
|
Income tax
expense
|
-
|
|
-
|
|
-
|
|
376
|
Net loss from
discontinued operations
|
-
|
|
-
|
|
-
|
|
(637)
|
Net
income
|
$
8,104
|
|
$
10,029
|
|
$
30,606
|
|
$
23,859
|
|
|
|
|
|
|
|
|
Basic earnings per
share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.33
|
|
$
0.46
|
|
$
1.23
|
|
$
1.14
|
Discontinued
operations
|
-
|
|
-
|
|
-
|
|
(0.03)
|
Total basic
earnings per share
|
$
0.33
|
|
$
0.46
|
|
$
1.23
|
|
$
1.11
|
|
|
|
|
|
|
|
|
Diluted earnings
per share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.33
|
|
$
0.46
|
|
$
1.22
|
|
$
1.13
|
Discontinued
operations
|
-
|
|
-
|
|
-
|
|
(0.03)
|
Total diluted
earnings per share
|
$
0.33
|
|
$
0.46
|
|
$
1.22
|
|
$
1.10
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
24,748
|
|
21,921
|
|
24,835
|
|
21,541
|
Diluted
|
24,873
|
|
22,031
|
|
25,001
|
|
21,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF INCOME - UNAUDITED - (F-4)
|
|
|
|
Quarters
Ended
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
(In thousands,
except per share data)
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
50,025
|
|
$
45,443
|
|
$
47,081
|
|
$
47,601
|
|
$
39,497
|
|
Securities and
other
|
4,479
|
|
4,254
|
|
3,800
|
|
3,887
|
|
3,626
|
|
Total interest and
dividend income
|
54,504
|
|
49,697
|
|
50,881
|
|
51,488
|
|
43,123
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
5,278
|
|
5,052
|
|
5,363
|
|
5,870
|
|
5,628
|
|
Borrowings and
subordinated debentures
|
3,357
|
|
3,541
|
|
3,581
|
|
3,653
|
|
2,270
|
|
Total interest
expense
|
8,635
|
|
8,593
|
|
8,944
|
|
9,523
|
|
7,898
|
|
Net interest
income
|
45,869
|
|
41,104
|
|
41,937
|
|
41,965
|
|
35,225
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
|
|
Loan related
fees
|
1,308
|
|
2,644
|
|
2,717
|
|
1,162
|
|
1,340
|
|
Mortgage banking
fees
|
444
|
|
2,129
|
|
2,217
|
|
5,850
|
|
4,306
|
|
Deposit related
fees
|
4,559
|
|
4,805
|
|
4,259
|
|
4,355
|
|
3,775
|
|
Insurance commissions
and fees
|
2,473
|
|
2,407
|
|
2,997
|
|
2,565
|
|
2,742
|
|
Wealth management
fees
|
2,137
|
|
2,070
|
|
2,264
|
|
1,865
|
|
1,774
|
|
Total fee
income
|
10,921
|
|
14,055
|
|
14,454
|
|
15,797
|
|
13,937
|
|
Other
|
832
|
|
546
|
|
344
|
|
421
|
|
375
|
|
Gain on sale of
securities, net
|
361
|
|
1,005
|
|
-
|
|
1,435
|
|
-
|
|
Non-recurring
gain
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
Total non-interest
income
|
12,114
|
|
15,606
|
|
14,798
|
|
17,653
|
|
14,313
|
|
Total net
revenue
|
57,983
|
|
56,710
|
|
56,735
|
|
59,618
|
|
49,538
|
|
Provision for loan
losses
|
3,178
|
|
2,700
|
|
2,400
|
|
2,840
|
|
2,500
|
|
Non-interest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
18,506
|
|
18,151
|
|
17,741
|
|
18,862
|
|
15,992
|
|
Occupancy and
equipment
|
5,614
|
|
5,737
|
|
5,768
|
|
5,985
|
|
4,599
|
|
Technology and
communications
|
3,304
|
|
3,480
|
|
2,991
|
|
2,949
|
|
2,302
|
|
Marketing and
promotion
|
590
|
|
603
|
|
638
|
|
483
|
|
419
|
|
Professional
services
|
1,757
|
|
1,764
|
|
1,490
|
|
1,600
|
|
1,327
|
|
FDIC premiums and
assessments
|
856
|
|
890
|
|
828
|
|
919
|
|
907
|
|
Other real estate
owned and foreclosures
|
138
|
|
284
|
|
23
|
|
66
|
|
42
|
|
Amortization of
intangible assets
|
1,307
|
|
1,345
|
|
1,377
|
|
1,357
|
|
1,314
|
|
Non-recurring and
merger related expenses
|
6,516
|
|
775
|
|
5,064
|
|
7,497
|
|
2,214
|
|
Other
|
4,196
|
|
4,906
|
|
3,563
|
|
4,548
|
|
3,046
|
|
Total non-interest
expense
|
42,784
|
|
37,935
|
|
39,483
|
|
44,266
|
|
32,162
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income
taxes
|
12,021
|
|
16,075
|
|
14,852
|
|
12,512
|
|
14,876
|
|
Income tax
expense
|
3,917
|
|
4,038
|
|
4,387
|
|
3,183
|
|
4,847
|
|
Net
income
|
$
8,104
|
|
$
12,037
|
|
$
10,465
|
|
$
9,329
|
|
$
10,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.33
|
|
$
0.49
|
|
$
0.42
|
|
$
0.39
|
|
$
0.46
|
|
Discontinued
operations
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total basic
earnings per share
|
$
0.33
|
|
$
0.49
|
|
$
0.42
|
|
$
0.39
|
|
$
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.33
|
|
$
0.48
|
|
$
0.42
|
|
$
0.38
|
|
$
0.46
|
|
Discontinued
operations
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total diluted
earnings per share
|
$
0.33
|
|
$
0.48
|
|
$
0.42
|
|
$
0.38
|
|
$
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
24,748
|
|
24,779
|
|
24,927
|
|
24,165
|
|
21,921
|
|
Diluted
|
24,873
|
|
24,956
|
|
25,136
|
|
24,396
|
|
22,031
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Company
acquired Beacon Federal Bancorp on October 19, 2012. The income
statements include operations of the acquired institution as
of that date.
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
ASSET QUALITY
ANALYSIS - (F-5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for the
Quarters Ended
|
|
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
(Dollars in
thousands)
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accruing
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
|
|
$
8,487
|
|
$
5,945
|
|
$
8,818
|
|
$
7,466
|
|
$
8,440
|
|
Commercial
mortgages
|
|
|
13,800
|
|
14,948
|
|
12,396
|
|
12,617
|
|
13,552
|
|
Commercial business
loans
|
|
|
2,753
|
|
3,481
|
|
3,519
|
|
3,681
|
|
2,024
|
|
Consumer
loans
|
|
|
3,227
|
|
2,405
|
|
2,325
|
|
1,748
|
|
1,823
|
|
Total non-accruing
loans
|
|
|
28,267
|
|
26,779
|
|
27,058
|
|
25,512
|
|
25,839
|
|
Other real estate
owned
|
|
|
3,561
|
|
2,713
|
|
2,513
|
|
1,929
|
|
1,399
|
|
Total non-performing
assets
|
|
|
$
31,828
|
|
$
29,492
|
|
$
29,571
|
|
$
27,441
|
|
$
27,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accruing
loans/total loans
|
|
|
0.70%
|
|
0.69%
|
|
0.70%
|
|
0.64%
|
|
0.76%
|
|
Total non-performing
assets/total assets
|
|
|
0.58%
|
|
0.56%
|
|
0.56%
|
|
0.52%
|
|
0.59%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR LOAN LOSSES
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
|
|
$
33,248
|
|
$
33,263
|
|
$
33,208
|
|
$
33,090
|
|
$
32,868
|
|
Charged-off
loans
|
|
|
(3,417)
|
|
(3,457)
|
|
(2,501)
|
|
(3,073)
|
|
(2,353)
|
|
Recoveries on
charged-off loans
|
|
|
239
|
|
742
|
|
156
|
|
351
|
|
75
|
|
Net loans
charged-off
|
|
|
(3,178)
|
|
(2,715)
|
|
(2,345)
|
|
(2,722)
|
|
(2,278)
|
|
Provision for loan
losses
|
|
|
3,178
|
|
2,700
|
|
2,400
|
|
2,840
|
|
2,500
|
|
Balance at end of
period
|
|
|
$
33,248
|
|
$
33,248
|
|
$
33,263
|
|
$
33,208
|
|
$
33,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses/total loans
|
|
|
0.83%
|
|
0.86%
|
|
0.86%
|
|
0.83%
|
|
0.97%
|
|
Allowance for loan
losses/non-accruing loans
|
|
|
118%
|
|
124%
|
|
123%
|
|
130%
|
|
128%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
|
|
$
(351)
|
|
$
(852)
|
|
$
(260)
|
|
$
(1,034)
|
|
$
(243)
|
|
Commercial
mortgages
|
|
|
(1,480)
|
|
(1,283)
|
|
(952)
|
|
(893)
|
|
(1,790)
|
|
Commercial business
loans
|
|
|
(940)
|
|
(93)
|
|
(631)
|
|
(496)
|
|
(99)
|
|
Home
equity
|
|
|
(174)
|
|
(121)
|
|
(199)
|
|
(22)
|
|
(90)
|
|
Other
consumer
|
|
|
(233)
|
|
(366)
|
|
(303)
|
|
(277)
|
|
(56)
|
|
Total, net
|
|
|
$
(3,178)
|
|
$
(2,715)
|
|
$
(2,345)
|
|
$
(2,722)
|
|
$
(2,278)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
|
0.32%
|
|
0.27%
|
|
0.23%
|
|
0.28%
|
|
0.27%
|
|
Net charge-offs (YTD
annualized)/average loans
|
|
0.28%
|
|
0.26%
|
|
0.23%
|
|
0.26%
|
|
0.25%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELINQUENT AND
NON-ACCRUING LOANS/TOTAL LOANS
|
|
|
|
|
|
|
|
|
|
30-89 Days
delinquent
|
|
|
0.42%
|
|
0.70%
|
|
0.61%
|
|
0.63%
|
|
0.62%
|
|
90+ Days delinquent
and still accruing
|
|
|
0.29%
|
|
0.40%
|
|
0.47%
|
|
0.48%
|
|
0.38%
|
|
Total accruing
delinquent loans
|
|
|
0.71%
|
|
1.10%
|
|
1.08%
|
|
1.11%
|
|
1.00%
|
|
Non-accruing
loans
|
|
|
0.70%
|
|
0.69%
|
|
0.70%
|
|
0.64%
|
|
0.76%
|
|
Total delinquent and
non-accruing loans
|
|
|
1.41%
|
|
1.79%
|
|
1.78%
|
|
1.75%
|
|
1.76%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
SELECTED FINANCIAL
HIGHLIGHTS - (F-6)
|
|
|
|
|
|
|
|
|
|
At or for the
Quarters Ended
|
|
|
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE
DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings,
diluted
|
$
0.43
|
|
$
0.48
|
|
$
0.54
|
|
$
0.54
|
|
$
0.52
|
|
|
|
Net earnings,
diluted
|
0.33
|
|
0.48
|
|
0.42
|
|
0.38
|
|
0.46
|
|
|
|
Tangible book
value
|
16.08
|
|
15.96
|
|
15.87
|
|
15.63
|
|
15.86
|
|
|
|
Total book
value
|
26.98
|
|
26.82
|
|
26.68
|
|
26.53
|
|
26.60
|
|
|
|
Market price at
period end
|
25.11
|
|
27.76
|
|
25.54
|
|
23.86
|
|
22.88
|
|
|
|
Dividends
|
|
0.18
|
|
0.18
|
|
0.18
|
|
0.18
|
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
Core return on
assets
|
0.81
|
%
|
0.92
|
%
|
1.03
|
%
|
1.02
|
%
|
1.00
|
%
|
|
|
Return on
assets
|
0.61
|
|
0.93
|
|
0.80
|
|
0.72
|
|
0.88
|
|
|
|
Core return on
equity
|
6.29
|
|
7.13
|
|
8.10
|
|
8.32
|
|
7.81
|
|
|
|
Core return on
tangible equity
|
11.18
|
|
12.84
|
|
14.57
|
|
15.24
|
|
14.17
|
|
|
|
Return on
equity
|
4.74
|
|
7.21
|
|
6.28
|
|
5.86
|
|
6.89
|
|
|
|
Net interest margin,
fully taxable equivalent
|
3.93
|
|
3.63
|
|
3.73
|
|
3.67
|
|
3.50
|
|
|
|
Fee income/Net
interest and fee income
|
19.23
|
|
25.48
|
|
25.63
|
|
27.35
|
|
28.35
|
|
|
|
Efficiency
ratio
|
60.98
|
|
63.05
|
|
57.14
|
|
59.68
|
|
56.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROWTH
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
loans, year-to-date (annualized)
|
1
|
%
|
(2)
|
%
|
0
|
%
|
29
|
%
|
22
|
%
|
|
|
Total loans,
year-to-date (annualized)
|
1
|
|
(6)
|
|
(10)
|
|
35
|
|
21
|
|
|
|
Total deposits,
year-to-date (annualized)
|
(7)
|
|
(14)
|
|
0
|
|
30
|
|
12
|
|
|
|
Total net revenues,
year-to-date, compared to prior year
|
24
|
|
28
|
|
39
|
|
39
|
|
34
|
|
|
|
Earnings per share,
year-to-date, compared to prior year
|
11
|
|
40
|
|
50
|
|
62
|
|
106
|
|
|
|
Core earnings per
share, year-to-date, compared to prior year
|
3
|
|
11
|
|
20
|
|
29
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
DATA (In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
5,450
|
|
$
5,224
|
|
$
5,245
|
|
$
5,297
|
|
$
4,634
|
|
|
|
Total earning
assets
|
4,856
|
|
4,629
|
|
4,646
|
|
4,683
|
|
4,140
|
|
|
|
Total
loans
|
|
4,024
|
|
3,871
|
|
3,889
|
|
3,989
|
|
3,418
|
|
|
|
Allowance for loan
losses
|
33
|
|
33
|
|
33
|
|
33
|
|
33
|
|
|
|
Total intangible
assets
|
272
|
|
272
|
|
273
|
|
274
|
|
239
|
|
|
|
Total
deposits
|
|
3,882
|
|
3,815
|
|
4,101
|
|
4,100
|
|
3,450
|
|
|
|
Total stockholders'
equity
|
673
|
|
673
|
|
674
|
|
667
|
|
591
|
|
|
|
Total core
income
|
10.7
|
|
11.9
|
|
13.5
|
|
13.2
|
|
11.4
|
|
|
|
Total net
income
|
8.1
|
|
12.0
|
|
10.5
|
|
9.3
|
|
10.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(current quarter annualized)/average loans
|
0.32
|
%
|
0.27
|
%
|
0.23
|
%
|
0.28
|
%
|
0.27
|
%
|
|
|
Allowance for loan
losses/total loans
|
0.83
|
|
0.86
|
|
0.86
|
|
0.83
|
|
0.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
to total assets
|
12.35
|
%
|
12.88
|
%
|
12.85
|
%
|
12.60
|
%
|
12.75
|
%
|
|
|
Tangible
stockholders' equity to tangible assets
|
7.74
|
|
8.10
|
|
8.06
|
|
7.82
|
|
8.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Reconciliation of
Non-GAAP financial measures, including all references to core and
tangible amounts, appear on pages F-9 and F-10. Tangible assets are total assets less total
intangible assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
All performance
ratios are annualized and are based on average balance sheet
amounts, where applicable.
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
AVERAGE BALANCES -
(F-7)
|
|
|
|
Quarters
Ended
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
(In
thousands)
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
Assets
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
$
1,247,661
|
|
$
1,218,192
|
|
$
1,290,989
|
|
$
1,340,375
|
|
$
1,207,635
|
Commercial
mortgages
|
1,353,923
|
|
1,381,755
|
|
1,406,628
|
|
1,404,515
|
|
1,276,909
|
Commercial business
loans
|
647,939
|
|
627,591
|
|
601,695
|
|
580,436
|
|
545,988
|
Consumer
loans
|
651,565
|
|
634,715
|
|
644,674
|
|
598,802
|
|
368,795
|
Total
loans
|
3,901,088
|
|
3,862,253
|
|
3,943,986
|
|
3,924,128
|
|
3,399,327
|
Securities
|
735,307
|
|
655,396
|
|
591,304
|
|
572,268
|
|
559,116
|
Short-term
investments and loans held for sale
|
60,820
|
|
90,680
|
|
98,160
|
|
126,378
|
|
115,835
|
Total earning
assets
|
4,697,215
|
|
4,608,329
|
|
4,633,450
|
|
4,622,774
|
|
4,074,278
|
Goodwill and other
intangible assets
|
271,670
|
|
272,421
|
|
273,428
|
|
267,588
|
|
239,186
|
Other
assets
|
317,722
|
|
317,856
|
|
333,485
|
|
312,665
|
|
258,246
|
Total
assets
|
$
5,286,607
|
|
$
5,198,606
|
|
$
5,240,363
|
|
$
5,203,027
|
|
$
4,571,710
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
NOW
|
$
345,682
|
|
$
358,255
|
|
$
368,392
|
|
$
355,366
|
|
$
291,158
|
Money
market
|
1,329,591
|
|
1,358,590
|
|
1,477,497
|
|
1,404,113
|
|
1,170,840
|
Savings
|
442,408
|
|
449,296
|
|
441,547
|
|
422,447
|
|
376,064
|
Time
|
1,064,199
|
|
1,087,357
|
|
1,148,345
|
|
1,161,175
|
|
1,039,301
|
Total
interest-bearing deposits
|
3,181,880
|
|
3,253,498
|
|
3,435,781
|
|
3,343,101
|
|
2,877,363
|
Borrowings and
notes
|
708,798
|
|
574,822
|
|
423,739
|
|
519,831
|
|
531,076
|
Total
interest-bearing liabilities
|
3,890,678
|
|
3,828,320
|
|
3,859,520
|
|
3,862,932
|
|
3,408,439
|
Non-interest-bearing
demand deposits
|
658,568
|
|
636,469
|
|
645,923
|
|
635,044
|
|
537,466
|
Other
liabilities
|
52,874
|
|
65,568
|
|
68,509
|
|
68,475
|
|
43,047
|
Total
liabilities
|
4,602,120
|
|
4,530,357
|
|
4,573,952
|
|
4,566,451
|
|
3,988,952
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
684,487
|
|
668,249
|
|
666,411
|
|
636,576
|
|
582,758
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
5,286,607
|
|
$
5,198,606
|
|
$
5,240,363
|
|
$
5,203,027
|
|
$
4,571,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
Total non-maturity
deposits
|
$
2,776,249
|
|
$
2,802,610
|
|
$
2,933,359
|
|
$
2,816,970
|
|
$
2,375,528
|
Total
deposits
|
3,840,448
|
|
3,889,967
|
|
4,081,704
|
|
3,978,145
|
|
3,414,829
|
Fully taxable
equivalent income adjustment
|
652
|
|
644
|
|
629
|
|
667
|
|
623
|
Total average
tangible equity
|
412,817
|
|
395,828
|
|
392,983
|
|
368,988
|
|
343,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average balances
for securities available-for-sale are based on amortized
cost. Total loans include non-accruing loans.
|
(2) Total average
tangible equity results from the subtraction of average goodwill
and other intangible assets from total average stockholders'
equity.
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
AVERAGE
YIELDS (Fully Taxable Equivalent - Annualized) -
(F-8)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning
assets
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
3.99
|
%
|
4.19
|
%
|
4.04
|
%
|
4.00
|
%
|
4.28
|
%
|
Commercial
loans
|
5.86
|
|
4.93
|
|
5.24
|
|
5.29
|
|
4.85
|
|
Consumer
loans
|
4.39
|
|
4.78
|
|
4.94
|
|
4.56
|
|
3.97
|
|
Total
loans
|
5.02
|
|
4.67
|
|
4.75
|
|
4.73
|
|
4.62
|
|
Securities
|
2.77
|
|
3.00
|
|
3.04
|
|
3.17
|
|
3.02
|
|
Short-term
investments and loans held for sale
|
4.05
|
|
2.02
|
|
1.83
|
|
2.86
|
|
2.15
|
|
Total earning
assets
|
4.66
|
|
4.38
|
|
4.51
|
|
4.49
|
|
4.27
|
|
|
|
|
|
|
|
|
|
|
|
|
Funding
liabilities
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
NOW
|
0.18
|
|
0.26
|
|
0.29
|
|
0.35
|
|
0.28
|
|
Money
market
|
0.44
|
|
0.39
|
|
0.39
|
|
0.43
|
|
0.47
|
|
Savings
|
0.16
|
|
0.17
|
|
0.18
|
|
0.20
|
|
0.18
|
|
Time
|
1.29
|
|
1.23
|
|
1.23
|
|
1.31
|
|
1.48
|
|
Total
interest-bearing deposits
|
0.66
|
|
0.62
|
|
0.63
|
|
0.70
|
|
0.78
|
|
Borrowings and
notes
|
1.88
|
|
2.47
|
|
3.43
|
|
2.80
|
|
1.70
|
|
Total
interest-bearing liabilities
|
0.88
|
|
0.90
|
|
0.94
|
|
0.98
|
|
0.92
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
3.78
|
|
3.48
|
|
3.57
|
|
3.51
|
|
3.35
|
|
Net interest
margin
|
3.93
|
|
3.63
|
|
3.73
|
|
3.67
|
|
3.50
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
funds
|
0.75
|
|
0.77
|
|
0.81
|
|
0.84
|
|
0.80
|
|
Cost of
deposits
|
0.55
|
|
0.52
|
|
0.53
|
|
0.59
|
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cost of funds
includes all deposits and borrowings.
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES - (F-9)
|
|
|
|
|
|
|
|
|
|
At or for the
Quarters Ended
|
|
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
|
(Dollars in
thousands)
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
Net
income
|
|
$
8,104
|
|
$
12,037
|
|
$
10,465
|
|
$
9,329
|
|
$
10,029
|
|
Adj: Gain on sale of
securities, net
|
|
(361)
|
|
(1,005)
|
|
-
|
|
(1,435)
|
|
-
|
|
Adj: Other
non-recurring gain
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1)
|
|
Plus: Non-recurring
and merger related expense
|
|
6,516
|
|
775
|
|
5,064
|
|
7,497
|
|
2,214
|
|
Adj: Out of period
interest revenue adjustment
|
|
(2,222)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Adj: Variable
compensation adjustment (5)
|
|
500
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Adj: Income
taxes
|
|
(1,788)
|
|
93
|
|
(2,042)
|
|
(2,147)
|
|
(859)
|
|
Total core
income
|
(A)
|
$
10,749
|
|
$
11,900
|
|
$
13,487
|
|
$
13,244
|
|
$
11,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
income
|
|
$
12,114
|
|
$
15,606
|
|
$
14,798
|
|
$
17,653
|
|
$
14,313
|
|
Adj: Gain on sale of
securities, net
|
|
(361)
|
|
(1,005)
|
|
-
|
|
(1,435)
|
|
-
|
|
Adj: Other
non-recurring gain
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1)
|
|
Total core
non-interest
income
|
|
11,753
|
|
14,601
|
|
14,798
|
|
16,218
|
|
14,312
|
|
Net interest
income
|
|
45,869
|
|
41,104
|
|
41,937
|
|
41,965
|
|
35,225
|
|
Adj: Out of period
interest revenue adjustment
|
|
(2,222)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total core
revenue
|
|
$
55,400
|
|
$
55,705
|
|
$
56,735
|
|
$
58,183
|
|
$
49,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
$
42,784
|
|
$
37,935
|
|
$
39,483
|
|
$
44,266
|
|
$
32,162
|
|
Less: Non-recurring
and merger related expense
|
|
(6,516)
|
|
(775)
|
|
(5,064)
|
|
(7,497)
|
|
(2,214)
|
|
Adj: Variable
compensation adjustment (5)
|
|
(500)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Core non-interest
expense
|
|
35,768
|
|
37,160
|
|
34,419
|
|
36,769
|
|
29,948
|
|
Less: Amortization of
intangible assets
|
|
(1,307)
|
|
(1,345)
|
|
(1,377)
|
|
(1,357)
|
|
(1,314)
|
|
Total core tangible
non-interest
expense
|
|
$
34,461
|
|
$
35,815
|
|
$
33,042
|
|
$
35,412
|
|
$
28,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(B)
|
$
5,287
|
|
$
5,199
|
|
$
5,240
|
|
$
5,203
|
|
$
4,572
|
|
Total average
stockholders'
equity
|
(C)
|
684
|
|
668
|
|
666
|
|
637
|
|
583
|
|
Total average
tangible stockholders'
equity
|
(D)
|
413
|
|
396
|
|
393
|
|
369
|
|
344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity, period-end
|
|
673
|
|
673
|
|
674
|
|
667
|
|
591
|
|
Less:
Intangible assets, period-end
|
|
(272)
|
|
(272)
|
|
(273)
|
|
(274)
|
|
(239)
|
|
Total tangible
stockholders' equity, period-end
|
(E)
|
$
401
|
|
$
401
|
|
$
401
|
|
$
393
|
|
$
352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shares
outstanding, period-end
(thousands)
|
(F)
|
24,952
|
|
25,096
|
|
25,254
|
|
25,148
|
|
22,213
|
|
Average diluted
shares outstanding (thousands)
|
(G)
|
24,873
|
|
24,956
|
|
25,136
|
|
24,396
|
|
22,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings per
share, diluted
|
(A/G)
|
$
0.43
|
|
$
0.48
|
|
$
0.54
|
|
$
0.54
|
|
$
0.52
|
|
Tangible book value
per share, period-end
|
(E/F)
|
$
16.08
|
|
$
15.96
|
|
$
15.87
|
|
$
15.63
|
|
$
15.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core return
(annualized) on assets
|
(A/B)
|
0.81
|
%
|
0.92
|
%
|
1.03
|
%
|
1.02
|
%
|
1.00
|
%
|
Core return
(annualized) on equity
|
(A/C)
|
6.29
|
|
7.13
|
|
8.10
|
|
8.32
|
|
7.81
|
|
Core return
(annualized) on tangible equity (4)
|
(A/D)
|
11.18
|
|
12.84
|
|
14.57
|
|
15.24
|
|
14.17
|
|
Efficiency ratio
(1)
|
|
60.98
|
|
63.05
|
|
57.14
|
|
59.68
|
|
56.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
|
Tax credit benefit of
tax shelter investments
|
|
$
458
|
|
$
458
|
|
$
458
|
|
$
483
|
|
$
483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Efficiency ratio
is computed by dividing total core tangible non-interest expense by
the sum of total net interest income on a fully taxable
equivalent basis and total core non-interest income adjusted to
include tax credit benefit of tax shelter investments. The Company
uses this non-GAAP measure, which is used widely in the banking
industry, to provide important information regarding its
operational efficiency.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Ratios are
annualized and based on average balance sheet amounts, where
applicable.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Quarterly data
may not sum to year-to-date data due to the out-of-period
adjustment recorded in the third quarter of 2013 and
rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Core return on
tangible equity is computed by dividing the total core income
adjusted for the tax-affected amortization of intangible
assets, assuming a 40% marginal rate, by tangible
equity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) Variable
compensation adjustment based on additional revenue following the
out-of-period adjustment recorded in the third quarter of
2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES - (F-10)
|
|
|
|
|
|
|
|
|
|
At or for the Nine
Months Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
(Dollars in
thousands)
|
|
2013
|
|
2012
|
|
Net
income
|
|
$
30,606
|
|
$
23,859
|
|
Adj: Gain on sale of
securities, net
|
|
(1,366)
|
|
(7)
|
|
Adj: Other
non-recurring gain
|
|
-
|
|
(43)
|
|
Plus: Non-recurring
and merger related expense
|
|
12,355
|
|
10,522
|
|
Adj: Out of period
interest revenue adjustment
|
|
(1,287)
|
|
-
|
|
Adj: Variable
compensation adjustment (5)
|
|
500
|
|
-
|
|
Adj: Income
taxes
|
|
(4,116)
|
|
(3,967)
|
|
Adj: Net loss from
discontinued operations
|
|
-
|
|
637
|
|
Total core
income
|
(A)
|
$
36,692
|
|
$
31,001
|
|
|
|
|
|
|
|
Total non-interest
income
|
|
$
42,518
|
|
$
36,479
|
|
Adj: Gain on sale of
securities, net
|
|
(1,366)
|
|
(7)
|
|
Adj: Other
non-recurring gain
|
|
-
|
|
(43)
|
|
Total core
non-interest
income
|
|
41,152
|
|
36,429
|
|
Net interest
income
|
|
128,910
|
|
101,416
|
|
Adj: Out of period
interest revenue adjustment
|
|
(1,287)
|
|
-
|
|
Total core
revenue
|
|
$
168,775
|
|
$
137,845
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
$
120,202
|
|
$
96,870
|
|
Less: Non-recurring
and merger related expense
|
|
(12,355)
|
|
(10,522)
|
|
Adj: Variable
compensation adjustment (5)
|
|
(500)
|
|
-
|
|
Core non-interest
expense
|
|
107,347
|
|
86,348
|
|
Less: Amortization of
intangible assets
|
|
(4,029)
|
|
(3,989)
|
|
Total core tangible
non-interest
expense
|
|
$
103,318
|
|
$
82,359
|
|
|
|
|
|
|
|
(Dollars in
millions, except per share data)
|
|
|
|
|
|
Total average
assets
|
(B)
|
$
5,242
|
|
$
4,572
|
|
Total average
stockholders'
equity
|
(C)
|
$
673
|
|
$
583
|
|
Total average
tangible stockholders'
equity
|
(D)
|
$
401
|
|
$
336
|
|
|
|
|
|
|
|
Total stockholders'
equity, period-end
|
|
$
673
|
|
$
591
|
|
Less: Intangible
assets, period-end
|
|
(272)
|
|
(239)
|
|
Total tangible
stockholders' equity, period-end
|
(E)
|
$
401
|
|
$
352
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(F)
|
24,952
|
|
22,213
|
|
Average diluted
common shares outstanding (thousands)
|
(G)
|
25,001
|
|
21,635
|
|
|
|
|
|
|
|
Core earnings per
common share, diluted
|
(A/G)
|
$
1.47
|
|
$
1.43
|
|
Tangible book value
per common share, period-end
|
(E/F)
|
$
16.08
|
|
$
15.86
|
|
|
|
|
|
|
|
Core return
(annualized) on assets
|
(A/B)
|
0.93
|
%
|
1.02
|
%
|
Core return
(annualized) on equity
|
(A/C)
|
7.27
|
|
8.00
|
|
Core return
(annualized) on tangible equity (4)
|
(A/D)
|
13.02
|
|
13.24
|
|
Efficiency ratio
(1)
|
|
60.04
|
|
58.30
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
Tax credit benefit of
tax shelter investments
|
|
$
1,374
|
|
$
1,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Efficiency ratio
is computed by dividing total core tangible non-interest expense by
the sum of total net interest income on a fully taxable equivalent
basis and total core non-interest income adjusted to include tax
credit benefit of tax shelter investments. The Company uses this
non-GAAP measure, which is used widely in the banking industry, to
provide important information regarding its operational
efficiency.
|
|
|
|
|
|
|
|
(2) Ratios are
annualized and based on average balance sheet amounts, where
applicable.
|
|
|
|
|
|
|
|
(3) Quarterly data
may not sum to year-to-date data due to the out-of-period
adjustment recorded in the third quarter of 2013 and
rounding.
|
|
|
|
|
|
|
|
(4) Core return on
tangible equity is computed by dividing the total core income
adjusted for the tax-affected amortization of intangible
assets, assuming a 40% marginal rate, by tangible
equity.
|
|
|
|
|
|
|
|
(5) Variable
compensation adjustment based on additional revenue following the
out-of-period adjustment recorded in the third quarter of
2013.
|
|
|
|
|
|
|
|
SOURCE Berkshire Hills Bancorp, Inc.